Playing the Outfield

Dave SchulerAugust 14, 2014

The process of catching a fly ball in baseball isn’t one of placing yourself where the ball is. It’s a complex problem of figuring out where the ball will be, reconciled with the time it will take you to get there, and having the athletic prowess to do that. That’s why crafting good policy is difficult, too. The problems you’re trying to solve don’t stand still while you’re trying to solve them.

That’s the kernel of truth in Dr. Scott Atlas’s criticism of the PPACA: the very existence of the law will change the structure of the healthcare and insurance systems it’s intended to reform in ways that its authors could not, cannot, and will not be able to predict. That has several implications. First, the longer the implementation and enforcement of the law are postponed, the greater the gap between the system it was designed for and the system that will exist will be. And, more importantly from my perspective, it assumes continuing refinement of the law over time at a faster pace than our system of government can manage.

However, there are plenty of untruths and half-truths in his op-ed as well. For example, I think the only way the PPACA can be characterized as “a halfway move toward the single-payer model” is if other payers are withdrawing themselves at an appreciable rate. To my eye that doesn’t seem to be happening, at least not yet.

Nonetheless, it’s true that healthcare costs are rising everywhere, not just here, even under single-payer systems and fully socialized systems which Dr. Scott jumbles in his op-ed.

I have some questions. I think it’s clear that the future of healthcare financing is some combination of public and private. What’s the right balance and how is it achieved? Where will the ball be when we can get there?

Also, what is the role of the U. S. system of healthcare and insurance in increasing costs outside the U. S.? If you say “there isn’t any”, you’re asserting that the cost of training and paying providers is irrelevant to costs, a remarkable assertion, or that providers are not portable which is simply false.

I am not sure what will happen on the insurance side. On the retail side, I can say that costs have become truly important for the first time in my career. Not to say that revenue is unimportant. In our latest project aimed at saving costs, we also found that the network has been missing out on a lot of revenue. Still, cost control is what we are concentrating on right now.

Also, I think I would be remiss in not pointing out that in some states we are already pretty close to single payer since most states have one or two major payers. When you model it out, you expect costs to be higher in a for profit system when you have very few or very many insurers. (Think market power.) AFAICT, Obamacare does not address this directly. It does require that insurers cover a basic menu of care, so it does have a leveling effect of sorts, but I doubt that is adequate to bring in new insurers in states with few insurance providers.

I think we need to keep in mind that spending = what is paid by patients + what is paid by insurers + what is paid by the government (all levels). I don’t know that we have the data to determine what direction if any they are going in. We can be pretty sure it’s up we just don’t know how fast.

A lot of the reasoning seems as faulty to me as were the arguments for ACA (“see, these other countries are doing it so it could definitely work here!” for example) but it does at least use the premise that we need to find a way forward and address the flaws of the past as well as new problems that have been introduced into the system by ACA.